Banks, farming inquiry begins

EMOTIONAL stories of farmers being kicked off the land that has been in their family for generations are expected to be aired at the banking royal commission.

But Nationals Senator John Williams does not want the inquiry to lead to such strict regulations being placed on the banks that they don’t lend to farmers.

“That would be an absolute disaster,” he said.

Senator Williams, who was a strong advocate for the royal commission and was involved in last year’s Senate inquiry into rural lending, said he had heard some very good and also very bad stories about banks’ treatment of farmers.

“I’m very confident the sentiment of sympathy is growing in the banks when it comes to handling the family farmer,” he said.

Still, Senator Williams and National Farmers Federation president Fiona Simson expect the case studies at a royal commission hearing in Brisbane this week will involve sad stories.

“I think we’re going to hear some pretty torrid personal stories of people and their dealings with some of the banks,” Ms Simson said.

“It’s obviously going to be an emotional time for people but it’s good for them to have their day in front of the commission.”

Senator Williams and Ms Simson stress a farm is different to other small businesses, given it is also the farmer and their family’s home. “To withdraw funding from somebody can be catastrophic on a number of levels and can really place them in a difficult position,” Ms Simson said.

She hoped the royal commission would look at contract terms, including better transparency and having longer terms and notice periods.

“We do need to make sure that when these contracts are negotiated that the conditions in there cater for

I THINK WE’RE GOING TO HEAR SOME PRETTY TORRID PERSONAL STORIES OF PEOPLE AND THEIR DEALINGS WITH … BANKS

NATIONAL FARMERS FEDERATION PRESIDENT FIONA SIMSON

changes in seasonal conditions and recognise that the families are involved.”

Australian Banking Association CEO Anna Bligh acknowledged the industry faced reforms generally but said any changes must be thoughtful and carefully considered.

“Clearly, more reform is necessary but it’s critical that the pendulum doesn’t swing so far that it reduces lending and makes home ownership or running a business such as a farm more difficult,” Ms Bligh said.

“The banking industry is acutely aware of the difficult circumstances facing some farmers across Australia.”